RESTORATION OF APPROPRIATE REIMBURSEMENT RATES FOR HOSPITALS

WHEREAS, the Balanced Budget Act of 1997 (BBA) made significant reductions in spending for both the Medicare and Medicaid programs; and

WHEREAS, a significant portion of these spending reductions represent payments that reimburse all hospitals and payments that specifically reimburse teaching hospitals for their special missions, medical education and caring for low-income Medicare, Medicaid and indigent populations; and

WHEREAS, the Balanced Budget Refinement Act of 1999 (BBRA) provided only a fraction of the BBA relief needed by hospitals; and

WHEREAS, the Congressional Budget Office's new fiscal estimate shows that the BBA-mandated Medicare cuts alone will exceed congressional intent by $62 billion; and

WHEREAS, without further BBA relief, six out of 10 hospitals will not be able to cover the costs of treating Medicare patients by the year 2004, and teaching hospitals will find it increasingly difficult if not impossible to continue their clinical, education and research missions, ultimately affecting patient care throughout the United States; and

WHEREAS, the BBA of 1997 provides for Medicare payment updates for hospital inpatient services that are below the market basket index, Medicare's measure of inflation; and

WHEREAS, Indirect Medical Education (IME) payments are absolutely critical for teaching hospitals to maintain their societal missions, and the BBRA only delayed the BBA-mandated IME payment cut of 29 percent for one year; and

WHEREAS, the Medicare and Medicaid disproportionate share hospital (DSH) programs both recognize the special needs of hospitals that serve large numbers of low-income patients and preserve access to hospital services for Medicare and Medicaid beneficiaries:

RESOLVED, that we support legislation restoring full inflationary updates for Medicare payments for hospital inpatient services ("The American Hospital Preservation Act" (S. 2018), "Hospital Preservation and Equity Act" (H.R. 3580)); and

RESOLVED, that we support legislation freezing the Medicare IME payments to teaching hospitals at its present rate of 6.5 percent ("The Teaching Hospital Preservation Act of 2000" (S. 2394/H.R. 4239); and

RESOLVED, that we support legislation which freezes BBA-mandated Medicare DSH and Medicaid DSH cuts at the FY 2000 level ("Medicaid DSH Preservation Act of 2000" (S. 2299/H.R. 3699), "Medicaid Safety Net Hospital Act of 2000" (S. 2308/H.R. 3710))